When Covid-19 broke in early 2020, it sent shockwaves around the world. One area that was impacted heavily was the construction industry. Lumber is the most well-known price increase of the pandemic, but many of the supplies that HVAC contractors rely on were affected as well. Supply chain issues caused by the pandemic combined with manufacturers being unable to operate at full capacity made it hard for contractors across a variety of fields to get the supplies they needed. Although the pandemic is slowing down, the supply chain it impacted is going to take a while to rebound. This article looks at the specific challenges facing those in the HVAC field.
Although HVAC contractors have no real reliance on lumber, that isn't the only raw material that saw a decrease in availability as a result of the pandemic and other issues. Lumber has received the bulk of the attention, but raw materials of all kinds have suffered a slowdown in production and shipping in 2020. Materials like metals and plastics are important parts of the HVAC manufacturing process. Shortages in those areas make it hard for HVAC manufacturers to keep up with the demand for equipment.
Perhaps the most important element in the equation is the cost of copper, which is used for electrical wire. A vital component of every piece of HVAC equipment, copper saw its prices rise due to transportation issues due to Covid, as well as the increased demand for the material as technologies that use the materials, such as 5G and electric vehicles, become more common.
Semiconductors, used as the brains of many HVAC parts, also took a hit. Not only did the pandemic affect these parts, but extreme weather in Texas and a fire at a large semiconductor factory in Japan also set back the supply of these vital components.
As with any shortage, there's a tendency for people to buy more than they need, for fear they won't be able to acquire the materials when they do need them. This, of course, only makes matters worse. The better way for contractors to ensure they have the materials they need is to keep in touch with suppliers to see what will be available and when. Those contractors who keep an accurate forecast of demand will be able to purchase what they need without putting undue strain on an already stressed supply chain.
Many contractors who have used a single supplier in previous years are finding the need to branch out and expand their supply lines. These fallback suppliers provide an extra option when the primary supplier is out of stock on a needed component.
Because of delays and inconsistent pricing resulting from the lopsided supply and demand, contractors need to be more open with their clients. Customers need to be aware that prices on materials may change, and contractors need to decide whether to pass those costs on to customers, in whole or in part.
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